White & Case Advises CDB on US$1.2bn Shariah-Compliant Financing

Global law firm White & Case LLP has advised China Development Bank (CDB) in its support of a US$1.2 billion Shariah-compliant Islamic financing for PT Natrindo Telepon Selular (AXIS), a cellular network operator in Indonesia. AXIS is a subsidiary of Saudi Telecom Company (STC).

This deal is the largest private sector Islamic financing to date in Indonesia and the first Islamic financing supported by China Development Bank. It is also one of the largest Shariah-compliant telecoms financings globally.

CDB's support is in the form of a financing facility to fund the build-out, development and roll-out of AXIS' cellular network services in Indonesia, including the procurement of equipment and civil works services from affiliates of Huawei Technologies Company Limited, one of the world's largest telecommunications equipment and services vendors.

The multi-sourced financing involved the following separate facilities:

(1) a US$400 million facility for equipment purchases from Huawei, underwritten by China Development Bank;
(2) a US$450 million Murabaha commercial facility, arranged by Deutsche Bank and HSBC and underwritten by Deutsche Bank and Saudi British Bank (SABB);
(3) a US$350 million facility for equipment purchases from Ericsson, arranged by HSBC, funded by AB Svensk Exportkredit (SEK) and backed by EKN, Sweden's Export Credit Agency.

All facilities have been structured in a Shariah-compliant manner.

Commenting on the deal, White & Case's head of China Practice, Xiaoming Li, said "This deal is one of the first Islamic financings by a Chinese Bank. It will go a long way to helping the Chinese banks understand the risks and rewards of Islamic financing and we expect it may well open a new path for outbound finance from China".

Shibeer Ahmed, who led the Islamic finance team on the deal, added: "This is another example of our ability to field a cross-jurisdictional team to advise on a major groundbreaking multi-tranche Islamic financing".

The White & Case team was led by partners Xiaoming Li (Beijing) and Shibeer Ahmed (Abu Dhabi) with support from associates David Li (Beijing), Nneka Wood and Sherief Rashed (Abu Dhabi) and Gee Hou Tng (Hong Kong).

Other legal advisors: Clifford Chance as advisors to AXIS; Baker & McKenzie as advisors to the syndicated facility financiers; Norton Rose as advisors to the Ericsson facility financers. Local counsel in Indonesia: Wiriadinata & Saleh as advisors to the Huawei facility financiers; Mochtar Karuwin Komar as advisors to AXIS; Hadiputranto, Hadinoto & Partners as advisors to the syndicate facility financiers and Ericsson facility financiers.

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